Fiat chief says firm can't afford Italian labor .

SabrinaCohen

MILAN -(MarketWatch)- Italian car maker Fiat SpA (F.MI) will end its membership of Italian business lobby Confidustria at the end of the year, the company's Chief Executive Sergio Marchionne said in a letter sent to the head of the lobby group Sept 30 and filed with the Italian stock exchange Monday.

Marchionne told Emma Marcegaglia, the head of Confindustria, that Fiat "can't afford to operate in an environment of uncertainty, incongruous with the conditions that exists elsewhere in the industrialized world."

In a separate statement also sent to the Italian stock exchange, the Turin-based company confirmed plans to continue its industrial activities in Mirafiori, and announced its new gasoline direct injection turbo engine for Alfa Romeo will be developed in Pratola Serra, in Southern Italy, in early 2013.

Fiat and Fiat Industrial (FI.MI), the truck division that was separated from Fiat and listed in January, have threatened to quit Confindustria in recent months. From January, neither company will be obliged to adhere to the terms of a national labor contract, to which Confindustria is a signatory.

CEO Marchionne has repeatedly said that the terms are outdated and prevent him from imposing new working conditions at plants in Italy where he wants to overhaul the manufacturing base, make it more efficient and increase production.

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